1. Corporate information
HOAC Foods India Ltd. (‘the Company’) was incorporated on 12th March 2018 as a Pvt. Ltd. company and was converted to Ltd company on 30th October 2023 . The Company is primarily engaged in manufacturing , processing & trading of Atta, Dal Spices, Oil and other products.
1.1 Basis of preparation of financial statements:
These financial statements have been prepared to comply with Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the nearest Hundred.
1.2 Use of estimates:
The preparation of financial statements, in conformity with Indian GAAP, requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.
1.3 Statement of significant accounting policies
a) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
i) Revenue
Sales are shown net of Goods and Service Tax and after deducting discounts if any allowed against credit notes issued in terms of respective sales schemes.
ii) Interest
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.
b) Property, Plant & Equipment and Intangible Assets
i) Property, plant & Equipment and Intangible Assets are stated at their original cost of acquisition inclusive of inward freight, technical knowhow fees, duties and expenditure incurred in the acquisition, construction and installation.
ii) Input Tax Credit availed on capital equipment is accounted for by credit to respective fixed assets.
iii) Depreciation / amortization on tangible and intangible fixed assets is provided to the extent of depreciable amount on the straight line (SLM) Method. Depreciation is provided at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013
c) Inventories
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.
Cost of raw materials, packing materials, trading and other products are determined on FIFO basis.
d) GST:
GST is accounted for at the time of removal of goods.
Input Tax Credit, to the extent availed, is adjusted towards cost of materials.
e) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term investments with an original maturity of three months or less.
f) Gratuity / Retirement Benefits Retirement Benefits
The Company has adopted the Accounting Standard 15-Employees Benefits, prescribed under the Companies (Accounting Standards) Rules, 2006.The Company’s obligation towards various employees’ benefits has been recognized as follows:
Defined Contribution plans- Provident fund is covered under this category. The Co’s contribution towards the provident fund is charged to Profit & Loss account and is being regularly deposited with the PF department.
Defined Benefit plans- Gratuity are defined benefit plans. The present value of obligation under such defined benefit plans is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans is based on the market yield of government Securities as at the balance sheet date, having maturity period approximating to the terms of related obligations.
The liability towards gratuity (long term and short term) as ascertained by actuary and recognised in the balance sheet at present value. Actuarial gains/losses are recognised immediately in the Statement of Profit & Loss.
g) Provision, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
h) Unless specifically stated to be otherwise, these policies are consistently followed.
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